implement performance management system

How to Implement an Effective Performance Management System

Brian McDowell Uncategorized

Choosing to implement effective Performance Management System software is arguably the most efficient way to invest in your company’s talent. (Note: there’s a growing trend for PMS to be termed Employee Performance Engagement, or EPE instead). By keeping your team engaged with your wider business goals and with what skills they can develop, you will achieve alignment and satisfaction across the board.

Identifying talent is one thing, but keeping employees interested and constantly developing is another. Ensuring employee morale is in check is critical to productivity. Disengaged workers WILL look for work elsewhere – and, worse, discontent can spread like wildfire through an organisation, leaving you with employee retention issues and likely spooked customers too.

In employee management terms, focusing on the team you already have – rather than solely investing heavily in vacancies you have yet to fill – is the best way demonstrate to your team that their contribution is valued.

(What employee turnover really costs you.)

Smiling pirates make a happy crew!

Pirate day  in the office! Image under CC license via cjmartin

Employee Engagement Performance – Something to strive for

Allowing your line managers to time-effectively set and monitor clear objectives for each team member and evaluate how those objectives are being carried out via performance management is the most efficient methods of keeping a good spirit and coordinated effort.

performance management implement
Image under CC via personeelsnet

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So, what about metrics: Performance Management KPIs and measuring ROI

Key Result Areas (KRAs) should be assigned individually and expressed with weightage in percentages relative to the ‘perfect outcome’. Therefore a set weightage expressed in line with actual level of accomplishment in % gives a final KRA scoring.

Some tips for setting and measuring company and employee goals:

  • Set goals at the end of Q4 inline with commercial goals for following year.
  • Write REALISTIC goals WITH the employee for better buy in and comprehension of expectations – ensure staff have the tools they need to perform these functions
  • Don’t set too many goals – keep the amount of indicators reasonable and time effective to both record and analyse – but here’s 21 performance management metrics 
  • Review goals at least quarterly to monitor progress and trigger corrective action plans to remedy underperformance – if you want to see real progress don’t leave these to annual interviews
  • Instigate some official channels to communicate praise and acknowledgement of goal completion
  • Structure compensation and any appropriate remuneration increases inline with targets
  • Use Performance Management Software to track and monitor appraisals and to streamline and standardise the way your management run reviews and record progress – don’t leave this to old-fashioned paper templates and filing systems or disparate documents across shared folders or internal networks. Make your life easier!
  • If you integrate with a CPD (Continuing Professional Development) software or integrated HR system even better!

Implement Effective Performance Management System solution

If you make a system, make it usable!

Under CC via mlupo

A great PMS system is of no benefit if management cannot use the system adequately! Keep it simple and train managers in being effective and giving and receiving feedback from their teams.

If you feel ratings systems are not the right fit for your workforce, then there are still key issues to consistently address in regular reviews – and regular reviews scheduled by your HR software will ‘force a conversation’ that keeps management and staff engaged in regular dialogues about overall improvements in performance.

6 Questions to ask in performance management reviews:

(For forward-thinking organisations with clearly communicated strategies)

  1. Please can you outline what your objectives are within the organisation?
  2. What is this organisation’s strategy – how does your function fit into that?
  3. How well would you describe that you are doing in line with the direction of the overall and individual strategies?
  4. What are your priorities in terms of what to achieve in the coming period?
  5. How well equipped are you to deliver those goals?
  6. What do I, as your line manager, need to do to help you achieve those aims?

Implement Effective Performance Management System software

Image CC license via angelune


MYTH: Implementation and operation of the PMS requires time and effort.

BUSTED: Not so if you use automated processes or software systems in the cloud

MYTH: PMS implementation is expensive in license fees, rentals and staff time in implementing and training

BUSTED: Fast and easy-to-deploy cloud employee management software solutions allow fast introductions and management of PMS processes, easy collaborative file sharing and commenting by management, encourage employees to monitor scores based on accurate data and to submit documents. Smart use of reminders and scheduling means reviews are not missed, regular dialogue and team spirit kept high with praise and reward given when due and corrective actions flagged early. HR software that offers other capabilities built in, such as applicant tracking, timesheet and absence/staff time off/holiday racking etc. deliver further value.

MYTH: PMS is for larger companies that have dedicated HR departments

BUSTED: Line managers in almost any size of organisation can leverage economical HR Software for Performance management at surprisingly low costs per head and even claim these costs on expenses via their credit cards.

MYTH: Our IT department will need to investigate how cloud-based HR software can integrate with our current systems.

BUSTED: No! If you have no existing HR system, a secure, compliant SaaS (Software as a Service) solution is perfect and needs no complicated rollout or implementation. Think of it more like signing up for a time-efficient service than a complicated system that needs training and testing. SaaS software is constantly updated, scalable up and down as your organisation grows, secure, compliant and not reliant on hardware or other infrastructure. It also encourages employee self-service and engagement with their HR documentation and details and Continuous Professional Development (CPD) pathways for skills and training etc.

MYTH: We can’t implement PMS while our organisations is in an unstable phase.

BUSTED: But now, more than ever, is the time to take control, improve morale and get your house in order. Cloud-hosted HR software lets you manage personnel in a flexible, scalable, cost-effective manner to get your ‘ducks in a row’ and seize control of your team’s wellbeing and ensure the company is moving forward in a clear, coordinate fashion. With SaaS, online systems, you are not as heavily invested or committed as old-fashioned or enterprise-level software that is clunky, going to outdate fast, expensive and requires a big total commitment. SaaS means you can put expenses onto your OPEX (operating expense) list not CAPEX (capital expense) list and is therefore more tax and cashflow efficient. You don’t even need to be the main decision-maker in an organisation to deploy a PMS system to manage your team. If there is no other current alternative in place in your company – just roll it out in your department! (And be seen as a leader and enabler of a system that everyone will likely buy into.)

MYTH: It will take ages for our senior management to approve  HR Software system and related processes

BUSTED: Signing up for a cost-effective cloud system is as simple as saying to your team you’re replacing Skype with Slack or that team instant messaging should be by WhatsApp not text from now. This automation can be processed as a departmental or even individual expense and may not necessarily need sign off – in fact taking the initiative might even be smiled upon later when you demonstrate your value and time-saving to the rest of the organisation. So long as your solution provider meets ISO 27001 standards for security of information then you should meet most compliance obligations. There are plenty of departments using different systems at enterprise level as well as within SMEs / SMBs that do not create conflict – having disparate solutions is arguably better than having no across-the-board employee management software in place delivering PMS functionality.


Start with the end goal in mind

  • What exact problems are you trying to solve? For example, you want staff performance metrics/data, automation, record keeping and review periods run and administered consistently
  • Define your needs clearly and shop for solutions that address and focus on those specifically rather than as peripherals features.

Make the User Experience pleasurable:

  • Choose a nice system that’s intuitive and easy to navigate. Solutions that are to fancy and ‘enterprise-level’ for your team will likely not be adopted, whereas something more forgiving and intuitive will do the trick. You want buy-in and to save time and money so choose your workflow carefully so that the system’s welcomed company-wide.
  • Consider mood indicators, gamification and features that boost employee engagement and morale.

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How to Implement an Effective Performance Management System was last modified: December 5th, 2018 by Brian McDowell

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